Friday, January 29, 2010

Fourth Annual Conference on Development and ChangeJohannesburg, South Africa, April 9–11, 2010

Conference ThemeThe world economy is currently in the throes of a global economic crisis reminiscent of the great depressions of the 1930s and possibly that of the 1870s. As back then, the crisis resulted from major structural imbalances in financial and credit markets ultimately resulting in a retreat from free trade. Emergent debates about resurgent protectionism, alternative reserve currencies, stimulus packages and climate change policies suggests that the world economy has entered a phase of heightened change which will transform the development "equation" in varied and diverse ways. It is imperative at this time that development economists should engage with two crucial questions: the implications of these changes for the developing world and the prospects for "development" for the majority of people in the developing world.

The forthcoming conference invites submission of academic papers representing original and critical research focusing on the various aspects of the current global economic crisis. Papers are encouraged to employ historical and comparative perspectives where possible, on the impact of the current global financial and trade crises and its impact on the economic performance of developing countries. A focus on policy relevance and prescriptions for developing countries is highly recommended.

Contact conference director Ashwini Deshpande or visit Policy Innovations to download the full details. The deadline has been extended to February 10, 2010.

Thursday, January 28, 2010

I sat in on a conference call today with Forum One and OneWorld U.S. concerning the use of technology to direct earthquake relief and recovery funds to Haiti. There were some innovative orgs on the line, many of which have already been covered extensively in the media, so I'll just summarize some of the main points here.

Michaela Hackner of Forum One emphasized the transformation we're witnessing as charities reach out to people online and through their mobile devices. She said the crux of the new paradigm is money, connections, and awareness. You could also add speed: Michaela cited stats from the Red Cross indicating that they raised $10 million in 48 hours via text-message donations.

There is also software springing up to assist aid workers, such as the Ushahidi Haiti map, and a Creole translation app emerging out of Crisis Camp. Of course with the new frontier that digital technologies make possible there is also room for abuse, such as the false rumor that American Airlines would be donating relief flights.

Michaela's key conclusion was that humanitarian and development aid and technology innovators need to get in the same room to understand challenges and share data. This would not only make the current response more effective, but could also help with longer-term questions of planning, transparency, and sustainability.

Andy Carvin of NPR presented a high-resolution map of Port-au-Prince that volunteers have helped build from satellite imagery, tagging hospital locations and other useful data. He said the map is downloadable to GPS devices for navigating the city. He also mentioned the Google People Finder tool, which the State Department has embedded on their website.

Jacob Colker of The Extraordinaries described a crowd-sourced system whereby global volunteers help process missing persons data from their home computers. Haiti earthquake images are pulled from news stories and Flickr and uploaded to a system where volunteers tag the photos with various characteristics—female, living, etc.—to populate a search engine. Matches in the search engine are then used to try and identify or connect people on the ground. He said that of 750 potential matches generated this way they had tried to reach out to 60 families, but had found it very difficult to get in contact.

Clearly some of these collaborations and projects are in early stages and rapid response mode, but there is a lot of potential for funding long-term, innovative crisis management strategies and technology infrastructure.

Wednesday, January 27, 2010

Few people should have a regular column. I am not naming any names. But Newsweek's Fareed Zakaria is one of the handful of people who are smart, insightful, and original enough to deserve one. For instance, Zakaria rightly pinpointed "what is really at stake" in the recent Google vs. China episode. As we have argued here and Harry Harding has argued in Policy Innovations, it is about shaping global norms, or ethics. As he put in his Newsweek column, here is how Zakaria put it in CNN Opinion:

So far China has been remarkably successful at maintaining a system that has embraced markets, but also maintained a very controlled political system. My own view is that that cannot last forever, but that China is still in the early stages of modernization, and it is quite possible that it will be able to continue doing this for several decades. But I think it's very difficult to imagine China being a truly innovative country at the cutting edge of the information age, of global economics, if it has all these constraints on information, all this political control on human-to-human contact, which is what the next wave of the information age is all about. Ultimately the question is: Can China be a world leader that is admired, imitated and that shapes the global system and global values? There I have my doubts that an insular, inward-looking China that maintains tight political control over information and human contact will end up being the country that becomes the model for the world.

This is precisely what I heard last month during my month-long Asia trip, which took me to Singapore, Tokyo, Yokohama, Shanghai, and Nanjing. China's lack of openness broadly speaking is having a negative impact on its development. Specifically, the lack of free press and free expression is inhibiting the country's ability to tackle corruption and spur innovation. These ethical matters are not optional for civilizational advancement; they are essential for China to make the next leap, to be seen truly as a model, to emanate ideas, culture, brands, and enterprises that the world will seek.

In the coming years, assuming China's economy remains stable, the big picture question will be: How will China influence global norms?

When the United States was snapping at the heels of the British empire, the global hegemon of the early 20th century, the situation caused plenty of friction, even though both countries spoke the same language, shared similar cultures and were liberal democracies. China, in contrast, is a Confucian- Communist-capitalist hybrid under the umbrella of a one-party state that has so far resisted giving greater political freedom to a growing middle class. Now its ascendancy is about to set off what many officials and experts see as a backlash on both sides of the Pacific.

My guess is that China's influence on the world will result in a convergence of norms. More equality among nations at the global level and eventually more equality among people at home in non-free countries like China. The Google episode in China seems to prove my point: Companies like Google and countries will seek compromise. As relative power equalizes between companies and countries, it will be a process of real negotiation. The alternative is conflict or even disaster.

During my visit to China last month, I presented to a Chinese university several of the ethical gaps I see emerging between China, the United States, poor countries, and the rest of the world in the climate change arena. These gaps, in my mind, will make the climate change mitigation and adaption process difficult.

- The countries least responsible for climate change are the most vulnerable to its effects

- Emerging economies, such as China and India, no longer represent the interests of the poorest and most vulnerable, which seek immediate solutions, and are using the poor as a shield

- The pace of the international political process of negotiation in Copenhagen (and in Mexico City this November) does not match the scientific urgency of climate change

- Most of the countries that will most need to adapt to climate change do not have the political or budgetary capacity to place adaptation in their spending priorities

- Similarly, the security implications of flooding, droughts, and cyclones are not being considered by the countries most vulnerable to extremism and militants who could take advantage of disasters

- The right to "dirty" development and poverty relief is in opposition to the devastating consequences of climate change

- Exiting the dirty development path through clean tech can run up against the protection of intellectual property rights on technology

- The benefits accrued to previous generations by polluting contrast with the current conditions in poor countries

- Nuclear energy promulgation bumps up against the security interests of nuclear nonproliferation

- Central government goals of emissions reductions can oppose the goals of local governments, which are concerned about job creation or are plagued by local corruption and vested interests

- A global ethic on climate change therefore is needed since "finger pointing" will likely derail climate change negotiations yet "naming and shaming" is expected to be the likely enforcement mechanism

As scholar Samuel Fankhauser described in his Dec. 7, 2009 article "If it warms up, who's going to pay?" it may be better to consider adaptation support as "a way to show solidarity, to fairly deal with a shared challenge. The strong should help out the weak."

There was so much speculation over the past few days about today's announcement of Apple's new tablet, the iPad--just hours before President Obama's State of the Union address this evening. He is expected to give a speech cheer leading on the jobs front, but not the Steve Jobs front. (Here is what it would be like if Steve Jobs actually delivered the speech for President Obama.)

Will the Apple tablet overshadow Obama? I don't know. But here's my bet: If January 2010 ends up being remembered for a political speech, it won't be Obama's. It'll be the speech Secretary of State Hillary Clinton delivered Thursday. Clinton denounced Internet censorship around the world as an "information curtain" akin to the Iron Curtain of the Soviet era. She championed the "freedom to connect"—an updated, online version of freedom of assembly. And she outlined a place for politics in the march of information technology. "On their own, new technologies do not take sides in the struggle for freedom and progress," she observed. "But the United States does. We stand for a single internet where all of humanity has equal access to knowledge and ideas."

While our politicians must accommodate both domestic and international politics, technology acts as an empowering force for social change on both levels.

Similarly, and somewhat profanely, people have wondered whether the new Apple product will save us. Some have called it the "Jesus pad." Others hope that the device will save the newspaper and magazine industry.

At least Apple has given the media something fun to talk about again. In fact this blog post was a bit of an experiment. In 2005, Slate coyly wondered why the press loves Apple so much. It seems to me that, like religion and politics, Apple just grabs peoples' attention. It is that simple. If you put one of these things in a headline, you are bound to get readers, right?

In any case, my colleagues were wondering what the next logical step would be after the iPad. As an aside, I think the new tablet could only be called an "iPad" as Apple seems to have a style guide for its products: It simply looks for the shortest word possible (phone, pod, Mac, bud, etc.) If the iPad could be used for augmented reality maybe the next phase would be a tablet helmet (call it a hamlet?) that you wear on your head. But knowing Apple's style, my bet would be the "iHood" or, even shorter, the "iHat."

Wednesday, January 20, 2010

I just got off of a conference call with Andrew Witty, CEO of GlaxoSmithKline (GSK). He started out by saying that pharmaceutical companies like GSK need a more pluralistic approach toward solutions. To that end, GSK will pursue an "open innovation" strategy toward delivering better medicines to people in poor countries.

This strategy will include an "Open Lab" with 8 million dollars seed funding, an effort to share intellectual property to fight tropical diseases, and a pledge to create "sustainable pricing" for a malaria candidate vaccine.

This morning at Council on Foreign Relations, Witty made what he called "the most striking" commitment to put into public domain 13,500 chemical structures that may fight malaria. In doing this, Witty is hoping to stimulate more innovation efforts--increasing "the bandwidth of discovery." He does not necessarily expect GSK to be rewarded financially from this move. From the press release:

GSK has screened its pharmaceutical compound library of more than 2 million molecules for any that may inhibit the malaria parasite P.falciparum, the deadliest form of malaria, which is found primarily in sub-Saharan Africa. This exercise took five scientists a year to complete, and has yielded more than 13,500 compounds that could lead to the development of new and innovative treatments for malaria, which kills at least one million children every year in Africa.

GSK will make these findings, including the chemical structures and associated assay data, freely available to the public via leading scientific websites. The release of these data will mark the first time that a pharmaceutical company has made public the structures of so many of its compounds in the hope that they could lead to new medicines for malaria.

He said it was partly a personal decision. His travels, seeing suffering abroad, have led him to want to fight malaria. A malaria vaccine (called RTS,S) is already in Phase III of clinical trials and is two years away from reaching the market. Last year, this pivotal phase was launched and it is well underway in seven African countries. The results of Phase III are expected next year--2011, and if all goes as planned, the vaccine could reach the market in the next couple of years. As further background, RTS,S is the result of a partnership between GSK, The Malaria Vaccine Initiative (MVI) and the Bill and Belinda Gates Foundation. (CORRECTED)

Witty said he hoped that other companies would join GSK's open innovation strategy.

In Witty's travels to poor countries, he said he noticed that pieces of the solution were present but were not put together. And this problem has often been used as in excuse for poor health conditions. GSK hopes to find local partners to serve as delivery vehicles of GSK's investment.

In the long-term, "it is all about horizons," he said. He hopes that African economies become prosperous. But for now the company's interest in applying investments and ideas to improve the conditions in Africa--a "non-commercial" interest.

Could open innovation become the dominant paradigm for developing drugs in poor countries? "It is one step at a time," Witty said.

Tuesday, January 19, 2010

In the rush to save lives after the Haiti earthquake, Edward Brown, relief director for the Christian humanitarian organization World Vision, discusses how to handle some common misconceptions concerning disaster relief.

Blankets, shoes, and clothing are not a cost-effective way to help

The cost of shipping these items from around the country—let alone the time it takes to sort, pack and ship them—is prohibitive and entails much higher cost than the value of the goods themselves. World Vision has relief supplies already stocked in disaster-prone countries as well as in strategically located warehouses around the world. World Vision had supplies pre-positioned in Haiti in preparation for hurricane season, which allowed the agency to respond immediately to last week's earthquake.

These supplies are designed to meet international standards for humanitarian relief and are packaged up and ready to deploy as soon as a crisis strikes. Cash donations are the best, most cost-effective way to help aid groups deliver these life-saving supplies quickly, purchase supplies close to the disaster zone when possible and replenish their stocks in preparation for future disasters.

Send cash, it will get there

Reputable agencies send 80 percent or more of cash donations to the disaster site; the rest is invested in monitoring, reporting and other activities that facilitate transparency and efficiency in their operations, as well as in sharing information with those who can help. Donors have a right and a responsibility to ask aid groups how they will be using those donations, and what will be done with donations raised in excess of the need. Transparent and effective organizations will readily provide that information.

While hands-on service may feel like a better way to help in a crisis, disaster response is a highly technical and sensitive effort. Professionals with specialized skills and overseas disaster experience should be deployed to disaster sites. Volunteers without those skills can do more harm than good, and siphon off critical logistics and translations services. Qualified disaster professionals ensure that help is delivered effectively, safely and efficiently.

Hasty international adoptions of children are not recommended

Hearing about the specific needs of children often sparks a desire to adopt children who seem to have lost their families. However, early in a crisis, children need to be protected, but should remain in their home countries until authorities can confirm the locations of their family members and explore adoption possibilities within their own communities and cultures. International adoption may be the best solution for some children, but it is too early to know for sure in the first weeks of a crisis.

People are resilient in the face of natural disasters

Even in the poorest countries like Haiti, people often reveal a great deal of inner strength and often show a resourcefulness that can save lives. While support and aid are necessary, the Haitian people are by no means helpless.

--------------WHERE TO DONATE

For more information about how you can assist the Haiti relief effort, Charity Navigator, Google, and the Huffington Post have all assembled lists of organizations that are accepting donations and distributing aid.

Carnegie Council President Joel Rosenthal contributes his thoughts on religion and Obama's first year in office.

As President Obama completes his first year in office, little attention has been given to a question that sparked raucous argument during the campaign. How would Barack Obama's religious beliefs affect his performance as president?

During the campaign, the question of Obama's long relationship with Reverend Jeremiah Wright loomed large. In some quarters, so did Senator Obama's middle name. The Obama candidacy was widely and deeply opposed by religiously inspired groups against abortion rights and gay marriage. There was similar strong opposition from those arguing for "moral clarity" on the war on terror, calling into question Obama's credentials to fight Islamic religious extremism.

Despite these voices, the Obama campaign managed to attract some faith-based allies of its own. These were newly energized groups with progressive views on poverty, health care, and climate change as well as their own views on "just war." Themes of social justice resonated through the candidate's platform. An astute listener could hear echoes of connection to the religious roots of the civil rights movement.

Against this noisy background, President Obama entered office without a religious identity as distinct as that of George W. Bush. The impression of Obama's ambiguous religious identity was reinforced by the life story he inherited as well as his deliberate choices. His Muslim-Christian parentage, peripatetic biography, and lack of life-long association with any single church made it unsurprising that he did not have a default place to worship when he and his family moved to Washington, DC.

Obama's best-expressed affinity to a theological tradition places him in the arc of Reinhold Niebuhr, a favorite of those whose Christian faith emphasizes pluralism and social justice over any allegiance to a particular doctrine or sect. Niebuhr's ecumenism is noteworthy for its combination of spirituality and openness. At its height in the 1940s and 50s, Niebuhr's sermons, speeches, and writings helped propel inter-faith dialogues that included not only Protestants, Catholics and Jews, but secularists and non-believers too.

As he took office, it appeared that Obama's religious profile would remain very different from that of his predecessor. The new president would be more Reinhold Niebuhr than Billy Graham. Niebuhr's model is faith-based, for sure. But it steers away from doctrinal proclamations and it is highly sensitive to the dangers of self-righteousness. Rick Warren, the conservative and therefore controversial choice to deliver the Invocation at the inaugural ceremonies, seemed to nod to the president's preferences in his attempt at ecumenism and humility in his remarks.

With all of this as prelude, I was startled by a Politico article published last summer—six months into the president's term—titled "Obama Invokes Jesus More than Bush." In his first high-profile speeches of his presidency—including widely cited lectures at Cairo, Notre Dame, and Georgetown—President Obama spoke of the Christian faith in language more explicit than expected. This choice of language may have been a strategic decision meant to counteract those who have questioned his faith. Or it may have been a deliberate effort to rally his progressive faith-based constituency. Whatever the explanation, it is important to note Obama's language in describing faiths other than Christianity is also highly detailed. In his opening remarks in Cairo, the president brought "the good will of the American people and a greeting of peace from the Muslim communities in my country: assalaamu alaykum." He concluded the speech with direct quotes from the Koran, the Talmud, and the Bible.

Obama's engagement with religious language signifies a commitment to moral dialogue after a period of high moral assertion. His goal seems to be rescuing "moral clarity" from those who confuse it with "moral certainty." Moral clarity asserts that while we can agree on what is irretrievably wrong (killing of innocents, enslavement of peoples, destruction of our planet) we also understand that there are multiple conceptions of the good. Let's not proclaim that we have the ultimate answer to what is good for everybody; and in our pursuit of our vision of the good life, let's not forget that we often make uneasy compromises.

President Obama used his moment of maximum worldwide attention in his Nobel lecture to explain his view of the proper relation between religion and politics. His argument respects the transcendent powers of religion as an essential element of human flourishing. Yet it emphasizes limits. As the president said, "evil exists in the world" and it must be confronted. Yet "no Holy War can ever be a just war. For if you truly believe that you are carrying out divine will, then there is no need for restraint—no need to spare the pregnant mother or the medic, or even a person of one's own faith." In the tradition of Lincoln, Obama seeks commitment without excess, fidelity to principle without fanaticism.

It would be a mistake to oversimplify Obama's first year in office as essentially a story of the rise of a new technocratic regime. There is more going on here; there is the return of a new moral clarity that is genuinely humble, fact-based, and pluralistic. Pluralism can be defined as empathy for diversity while emphasizing what is common in humanity. This is a deeply American ethic. And it appears to be a priority of the president in both word and deed.

Saturday, January 16, 2010

I was just interviewed with Daniel Gross by Newsweek On Air about Google's announcement that it may leave China due to hacking of Gmail accounts and censorship in China. Here are my comments from the interview today.

How essential do you see greater freedom to Chinese economic development, and how long can they continue their current influence on world markets without it?

One freedom is perhaps the most crucial to economic development. That's freedom of speech. It is the only way Chinese society, companies, government, etc. can tackle its rampant corruption problem, which will impede the advancement of China. It is essential for the efficient use of capital, scientific development, effective market functions, fair trade, sound diplomatic relations, intellectual property protection. Without freedoms or the provision of public goods, the China brand will remain weak.

Given that global manufacturing is centered in China, the country will have more opportunities to build up its technology control capacity. One question in my mind is whether we will see an increasing gap between two "worlds" with competing norms—between emerging markets and rich countries or between state capitalist countries and free market democracies.

What about the argument that without tight controls the pent up aspirations of China's 1.3 BILLION people could cause chaos? Is it ethical to stir that pot?

To the contrary, without representational democracy, Chinese society is searching for some kind of valve to release its pressure and frustrations—over corruption, product safety scandals, pollution, land rights. Right now without freedom of speech, the balloon is being squeezed into Wild West internet forums in which people spread rumors and gossip. The country would benefit from a professionalized media sector with incentives to break stories freely.

Even Americans who don't care much about internet freedom in China are worried about Chinese cyber-attacks on U.S. companies and the government. How extensive is it and what are they after?

No one knows but the FBI, Pentagon, and just about every single serious China hand has been talking about China's cyber attacks for a long time. The nature of US-China relations and vulnerabilities is changing; it makes previous flare ups, for example over Hainan island, look quaint. The gravity has grown over the past year and culminated in December when more than 20 companies were attacked. It is very serious. Human rights organizations have used Gmail to communicate with people in China. If Gmail were compromised it would literally put people's lives in jeopardy.

Leaving aside the cynical view of Google's move, is there a real ethical question about whether that particular company's presence in China—even if complicit with Chinese censorship—helps spread democratic values, slowly to be sure?

From Google's perspective, it was a trade off. How much evil would it have to do in order to do some good and make money. They put it on a scale and decided that the amount of good it could do in China was worth it. That is no longer the case. During my last trip to China last month, everyone, including Chinese, complained about corruption, arrogance, fakery, and a lack of trust in that society.

The question has now been turned upside down: Is China worth it? I think the biggest effect of Google's move is that it will expand the debate and increase the range of options. It is no longer a given that you have to be in China to succeed. Companies and people can now think in a broader framework that takes into account ethical implications.

In a panel discussion at the Carnegie Council last week, Ian Bremmer of Eurasia Group—a frequent guest on this show—said a major ethical challenge for many companies and Western governments will mirror Google's—how to co-exist with China despite very different value systems, respecting theirs and our own. How do we best approach making those inevitable compromises?

That is one of the biggest questions of our time. I see a convergence of ideas and moral values. The Chinese are taking some of what is good from the West. The West might be able to take some things that are good in China. The answer is that we have to assess the merit and ethics of all decisions and stick to what we believe is right. What is right is also practical. In the long run, I feel China will come to that conclusion as well. It is a business concern, too. Another release valve in Chinese society can be people's relationship and connection with companies. Visits to China have suggested to me that building an ethical, trusted brand in the Chinese market would be a huge opportunity.

Wednesday, January 6, 2010

Thoughts from my recent trip to Japan (as well as China and Singapore) last month, re-posted from Huffington Post:

Just about four months in office, Japanese Prime Minister Yukio Hatoyama has paved an unnecessarily difficult path for himself and his Democratic Party of Japan (DPJ) for 2010 as a crucial upper house election approaches this July. As one Diet aide told me during my recent trip to Japan, Hatoyama has chosen a hard road (ibara no michi) and the most vexing policy issues seemingly as a show of personal development rather than political astuteness. A reoccurring theme I heard in Japan was that Hatoyama is not demonstrating leadership skills. As a result, support for his cabinet has dropped below 50 percent.

One example of this leadership problem has been Hatoyama's decision to try to hastily fulfill his campaign promises and his party "manifesto" rather than attempting to compromise with his country's various constituencies or stand up to coalition partners. He has thus painted himself into a corner . Ironically, as one think tank executive told me, the party's platform contained some ideas that were irrelevant to most Japanese people and some that were untested with the leaders of industry and government. This executive complained about Hatoyama's government budget public vetting process, which he likened to a Maoist charade, and the administration's soft approach toward China, which he felt embarrassed Japan's hardliners. Hatoyama's ambitious but laudable targets on carbon emissions and recent plan for economic growth were met with skepticism by the business community. Hatoyama's personal leadership skills are not matching with his high ideals .

My trip coincided with a controversial visit by the presumptive next president of China Xi Jinping with Emperor Akihito. The visit caused a stir with conservatives and the imperial family because it ignored scheduling protocol. On my way to a meeting with business executives in downtown Tokyo, I witnessed something I have never seen: Right-wing sound trucks were protesting Xi Jinping's visit by blasting messages in Mandarin rather than Japanese.

Although right-wing protests should not be considered a barometer of Japanese public sentiment, it should be noted that Japan is aging and in this way becoming more conservative. This episode also does illustrate another problematic theme of the Hatoyama administration so far: While the new government has righteously focused on helping the vulnerable in Japanese society, especially given Japan's relatively high poverty rate, it also has consistently managed to alienate powerful people in the bureaucracy, business, associations, media, and the U.S. alliance--creating what Ian Bremmer and Nouriel Roubini call a "no-party system" in which new faces in the coalition have few connections with the business elite.

Meanwhile, Hatoyama has become beholden to his coalition partners who are not after his best interests. As one executive told me, Mizuho Fukushima of the socialist party only cares about the bottom of Japanese society, while Shizuka Kamei of the People's New Party only cares about himself. Ultimately, many Japanese see Hatoyama's prime minister-ship as doomed because he is under the thumb of the DPJ's iconoclastic chief Ichiro Ozawa and is therefore unable to take real leadership.

Several people lamented Ozawa's recent direction of backroom bullying, away from his more principled past when he urged Japanese people to rely less on government and more on themselves. When he recently visited China with a Diet delegation, Ozawa bizarrely declared he was the commander of the People's Liberation Army. "The tail is wagging the dog," as Doshisha professor Noriko Hama put it in the New York Times and if Hatoyama fails to get control, the economy will backslide. The economy has already slid to its lowest level since 1991.

The DPJ's uncomfortable coalition has resulted in disagreements over the government budget and tension with the U.S. alliance. Despite campaign promises to cut waste, Kamei has urged Hatoyama to expand a government budget that is set to reach a record $1 trillion, sparking fears over Japan's debt-to-GDP ratio, which at 181 percent, is already the highest among industrialized nations. I happened to catch Kamei's mid-December press conference at the Foreign Correspondents' Club of Japan where he taunted Hatoyama and warned "so long as the CIA does not assassinate me, things will not go back to the way things were before, when Japan simply followed America's lead."

Gaffes from Japanese politicians are not unheard of but it is rare to come from cabinet members. Kamei's strategy appears to make the coalition so awkward for Hatoyama that he has to meet Kamei's demands on expanding social welfare. With a declining population and economic doldrums, the Japanese have long wondered if they were becoming a marginal player in the region or a "sick man of Asia," but with rhetoric like this cabinet's, the international image is more akin to Asia's dictatorships in Cambodia and North Korea, one executive said.

Several twists loom in the summer upper house election for Hatoyama. Most of all, electoral success will prove essential to the DPJ in regaining control of the agenda since poor results would only prolong the party's reliance on its coalition partners, making it more likely that it will continue to suffer from the perceived leadership problem. But until the election, Hatoyama must continue to accommodate his coalition partners on issues like the budget and the U.S. alliance but, in a catch-22, this accommodation is leading some voters to conclude that he is simply dithering on important issues.

Fortunately for the DPJ, its popularity remains higher than the opposition's and Hatoyama has been loosening up on his promises. But the party may calculate that its best path would be to replace Hatoyama. Speculation has already emerged over possible candidates: Deputy Prime Minster Naoto Kan is said to be a savvier politician, while younger transport minister Seiji Maehara has gained notoriety in his management of the restructuring of ailing Japan Airlines. The snag in this strategy would be that voters may conclude that the DPJ is no different from the previously-ruling Liberal Democratic Party and little change has taken place since last summer's elections after all. But if the DPJ fails, an already gloomy Japan will get gloomier. If the DPJ can't take off within four years, one of Japan's top public intellectuals Masaru Tamamoto told me, "Japan will be in a first class seat down the drain."

Monday, January 4, 2010

2009 was a hard year on many fronts and this feeling was reflected in the Carnegie Council audience favorites. Concerns include making sense of the financial crisis; predicting future risks; and coming up with new strategies for the 21st century.

No. 7 on the list, "Top Risks and Ethical Decisions, 2009," was so popular that on January 13 a similar panel will predict their "Top Risks" for 2010 (with live webcast).